Insurance Glossary

Insurance Term - Consolidated Omnibus Budget Reconciliation Act (COBRA)

The Consolidated Omnibus Budget Reconciliation Act of 1985, commonly known as COBRA, requires group health plans with 20 or more employees to offer continued health coverage for employees and their dependents for 18 months after the employee leaves or resigns from the organization. Longer durations of continuance are available under certain circumstances. If a former employee opts to continue coverage under COBRA, the former employee must pay the entire premium plus a 2 percent administration charge.

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